Water markets, prior appropriation

Flood irrigation in the Arkansas Valley via Greg Hobbs

From Water Deeply (Mark Squillace):

AS WESTERN STATES grapple with the best way to allocate dwindling water resources to meet multiple needs, water markets have emerged as one tool. But the idea is not without critics, such as Gary Wockner, who wrote a recent op-ed for Water Deeply about his skepticism that water markets will protect Western rivers.

Wockner raises three concerns with water markets: They commodify nature, there’s a lack of information about how much water they can really save and they skew funding to larger advocacy groups at the expense of others.

I see things differently.

Water markets don’t commodify nature. Rather, it is the prior appropriation system of “first in time, first in right” used through much of the West that gives private water users vested property rights in water. That is the root cause of this problem. It is entirely fair to criticize the prior appropriation system and if we could do it over I would advocate for a temporal permit system that protects the public interest in water from the outset and allows for periodic adjustments to these water permits as new information becomes available as to how to better protect the public interest in water resources. But that is not the world that we live in and it is unrealistic to think that will change – at least in the short term.

When it comes to information, we know enough already to show that the potential for marketing is vast. Current law – not lack of information – is the main obstacle to moving water efficiently. I have written on this topic and so perhaps have my own set of biases, but I believe that incentivizing crop switching, deficit irrigation and rotational fallowing by streamlining water transfers could yield vast quantities of water for new consumptive uses as well as non-consumptive ecological needs.

With regards to funding these projects, we should all be wary of the role that private foundations play in displacing the traditional role of government, ostensibly to promote the public good. And while we should be grateful for the positive work that private foundations have done to benefit our world, we must also acknowledge that private foundations have their own agendas, and their priorities may or may not reflect the public interest as that term might be defined by public agencies.

Nonetheless, so long as government fails or refuses to fund and address public needs adequately, foundations will have an important role to play. That does not mean that we must simply accept the choices that foundations make. On the contrary, we should demand that they be transparent and operate under standards that are fair. But we should judge the work of foundations on the merits and not be unduly suspicious of their motives. (To be clear, my work on water markets has not been funded by private foundations.)

This leads me to the broader point that Wockner raises about the need to reform our laws to protect “the rights of nature.” While I share a passion for protecting the ecological health of our water systems, I am skeptical about the prospects for an Ecuadorian-style constitutional provision.

The good news is we do not need it.

For the most part, we have the tools under our existing law that would allow us to protect the public values associated with water. We just need to use those tools in more creative and effective ways. Most prominently, in every state with positive water law (statutory and constitutional law), water is understood to be public property and, in most states, that translates into a trust responsibility on the part of the state to manage water for the benefit of the public.

Most states further demand that water resources be managed to protect the public interest. (The only state to have denied this responsibility is Colorado – the home state that Wockner and I share.)

Properly understood and properly applied, the public interest/public trust obligation offers the prospect that the communal values in water that we all share – to meet basic human needs, and to protect aesthetic, recreational and ecological needs – must be met first, before private rights are protected. Viewed in this light, and subject to these constraints, water markets are simply a mechanism for reallocating private water rights once public rights have been fully protected.

To be sure, many states have effectively ignored their obligation to manage water resources in the public interest. Other states have defined the public interest in ways that allow for balancing public values with private rights, as if they can be placed on an equal footing. This approach misconceives the nature of the public interest in water resources management. Only by first protecting those shared, communal values in water can we truly protect the public interest.

Rather than chasing a constitutional right of nature that seems unlikely to be realized, we should use the tools that we already have to rethink our approach to managing water resources. This will pose its own serious challenges; but because it is grounded in existing law, it stands a far greater chance of success. Let the hard work begin.

The Colorado River District’s take on Aspen’s conditional storage rights — @AspenJournalism

This map from 1984 is one of the few ever published that puts the Maroon and Castle creek reservoirs into the context of the city’s overall water system.

From Aspen Journalism (Brent Gardner-Smith):

Given the ongoing discussion in Aspen about the city’s conditional water storage rights tied to two reservoirs on Castle and Maroon creeks, we thought it would be informative to interview Chris Treese, the external affairs manager of the Colorado River Water Conservation District, which works to protect Western Slope water supplies.

Treese oversees the River District’s legislative and regulatory governmental relations in Denver and Washington, D.C. Treese, who has a master’s degree in economics, describes his current job responsibilities “as everything you don’t want lawyers and engineers doing,” but he still spends much of his time discussing the finer points of existing and proposed water law.

The city of Aspen filed two due diligence applications on Oct. 31 in Division 5 Water Court in Glenwood Springs, seeking to extend the conditional storage rights for Castle and Maroon creek reservoirs until 2022. The city originally filed for the rights in 1965. Ten opposers have filed statements of opposition in the two resulting diligence cases, and the next status conference among the parties is set for August 10, 2017.

We spoke with Treese on April 25 in the River District’s conference room in Glenwood Springs.

The resulting transcript has been edited for clarity.

BGS: Chris, thanks for doing this. It seems like the River District is well-positioned to shed some light on conditional water storage rights. The River District both holds conditional water rights and it also has walked away from conditional water rights, including on the Crystal River in 2013 which were part of the West Divide Project. And the River District is not involved in either of the two water court cases now underway in response to Aspen’s due diligence filings for the two reservoirs.

CT: Correct.

BGS: People have drawn parallels with the Crystal River rights that the River District abandoned, which were tied in part to two large dams, and the option, if you will, for Aspen to do the same. What’s similar and what’s different about the River District’s former rights on the Crystal and Aspen’s conditional storage rights on Castle and Maroon creeks?

CT: One of the similarities is they are both conditional water rights and simply by virtue of being conditional, they are what a conditional water right is, a placeholder in the priority system. But frankly, the differences leap to mind.

One difference is the ownership, as Aspen is a municipality, and municipalities have a different standard for diligence. The West Divide Project did not have a municipal purpose. It was originally, and remains, part of a federal project. And it was an out-of-basin diversion with its own impacts and concerns. I think those differences are significant.

The advantage, if you will, of having a municipal right, is you benefit from what’s known as the great and growing cities doctrine. In contrast to an agricultural or an industrial right with some fixed parameters around acreage or location and purpose of use, the courts have recognized that municipalities grow. And the responsibility of a municipal water provider is to provide water for present as well as the future.

As such municipalities have enjoyed almost unfettered ability to hold on to water rights and to perfect their conditional rights as part of their portfolio, either because they are growing or because they may grow. So the great and growing cities doctrine has provided an essentially unconstrained ability for municipalities to hold large quantities of water rights.

BGS: Wasn’t that latitude more closely defined by the two recent Supreme Court decisions known as the Pagosa decisions?

CT: Yes. So now you can’t say you will need the water in 100 years, but you can project need out 50 years. The Supreme Court found that 50 years is a reasonable planning horizon, and it recognizes that water projects take a long time to develop and water rights can be evermore critical during a period like 50 years. It also said that there has to be some common sense, some historical reality, to the projections over that 50-year period.

BGS: You mean you can’t just say Aspen’s population is going to from 7,000 to, say, 100,000 people, because, maybe it could.

CT: The applicant in the Pagosa cases – Pagosa Water and Sanitation District – were projecting 8% annual compounded growth for 100 years, and that was seen as overly aggressive by the court.

BGS: So there is a great and growing cities doctrine, which Aspen presumably can benefit from, but there’s also now some limitations placed on it from the Pagosa cases, primarily concerning reasonable growth projections.

CT: Right.

BGS: It strikes me that one of the similarities is the absurdist factor in both the Crystal River and the Maroon Creek situations. The dam forming Osgood Reservoir on the Crystal River would have flooded the town of Redstone, and Maroon Creek Reservoir requires a 155-foot-tall dam within view of the Maroon Bells. How should someone consider the relative impossibility of building such projects?

CT: One of the challenges to conditional water rights is that you have to prove diligence on the conditional right as filed. In the case of the Crystal it was a conditional water right for a reservoir that would have flooded a large part of the town of Redstone, if built exactly where and to the size as filed.

But the fact is that a water right, conditional or otherwise, can be changed, can be modified. It still would need to meet some of its basic purposes, but you could go into the water court and say, “There’s now a town of Redstone there and before there wasn’t a town of Redstone. And now the highway is there” and seek changes.

In fact, when the River District and its West Divide District partners looked at the Crystal conditional rights, we looked at how those conditional rights could be useful to the Crystal River valley, in contrast to their originally decreed purpose of transferring water out of the Crystal basin. But we knew we would still have to file diligence on the project as originally decreed.

BGS: So how flexible, how portable, are conditional water rights and their priority dates? There’s been ideas floated with the Castle and Maroon rights – that a smaller reservoir could be built, that they could be transferred to an underground storage facility on the city golf course, etc.

CT: What you can’t do is come in to a diligence filing and say, “We’ve talked about this.” That’s not diligence. You would have had to do more than talk about it, you would have had to at least study it.

BGS: Have studied moving it, for example?

CT: Yes, having studied moving it or using it for a different purpose at a different location. But it’s always up to the water court to find what’s adequate diligence, and they can look back at the original project and say, ” I think you’re talking about a new and different project. You need to file for a new water right.” That’s a risk.

BGS: Is there a threshold for what constitutes a new project?

CT: No.

BGS: Can we explore the standards of diligence? It seems there is a difference in what the water court might consider as diligence and what the average person might understand as diligence.

CT: There is a definition of diligence. It’s broad, and fairly non-specific in the legislation.

BGS: Is the diligence standard excused because you’re a municipality? Or does it still apply?

CT: It absolutely still applies. You must demonstrate to the satisfaction of the court that you are moving diligently toward development of the conditional water rights.

BGS: In the last clause of the city’s diligence application for the Maroon Creek Reservoir, it says, “applicant city of Aspen having demonstrated that it has steadily applied effort to complete the appropriation of the Maroon Creek reservoir conditional water right in a reasonably expedient and efficient matter under all the facts and circumstances … ” should be allowed to hang on to the rights for another six years.

So if someone has “steadily applied effort” to complete the appropriation of a conditional storage water right, does that means they’ve steadily applied effort towards storing the water in question?

CT: Yes.

BGS: Which also means they’re steadily applying effort toward building the structures, or dams, that would actually store the water in question?

CT: Well, the courts recognize that developing a reservoir is not as simple as getting a bunch of spray-painted shovels and having a ground-breaking ceremony. There are a lot of studies, and permits, and financing, and there’s a lot that goes into the early conditional period when planning for a reservoir.

BGS: But “steadily” applying effort means you’re moving towards actually storing the water some day, right?

CT: Yes.

BGS: It’s doesn’t mean you’re just hanging on to the water right for the sake of hanging on to the water right?

CT: Colorado water law prohibits speculation.

BGS: To be clear, if you’ve steadily applied effort to “complete the appropriation” of the conditional water right, then you’re moving towards storing the water. And if you are moving toward storing water, you need to be moving toward building a structure, a dam.

CT: Yes, right.

BGS: That’s what “complete the appropriation” ultimately means, right?

CT: Yes it does. Storage is clearly the end game, but diligence doesn’t specifically mean you’ve applied for a permit, or that you’ve hired bond counsel. There are a lot of early steps that may qualify as diligence.

BGS: Aspen, for example, does not claim it has been studying the reservoirs themselves, but instead it says that work on any part of integrated water management system counts as work on the whole system. So something like repairing pipes in downtown Aspen can count as steadily applying effort toward building the dams and reservoirs?

CT: Every water system is an integrated system in one form or another.

BGS: So what’s a citizen to make of that? In Aspen’s case, there appears to be little, if any, actual diligence on aspects of the projects that commonly comprise a feasibility study, such as water supply and demand studies, geological studies, construction analysis, permitting review, etc.

CT: I don’t know that.

BGS: Well, I’ve asked for such studies, and none have been forthcoming. What the city has told the court is that the reservoirs are part of their integrated water management system, they’ve been working on other parts of the system first, and work on one part of the system is work on all parts of the system.

That strikes me as a bit of a loophole, or at least a low bar. But how bulletproof of a legal argument is the integrated water management argument? Is that all the state requires? If you develop a reuse system at a wastewater plant, say, you can legitimately say you’ve also made progress on building two reservoirs?

CT: Nothing’s bulletproof, it’s up to the water court. And I’ll keep saying that. It’s to the satisfaction of the judge in water court. Or, actually, to the water referee and then, if necessary, the water court judge.

I can tell you the history of the integrated water system provision. The oil shale sector was the primary proponent for the amendment to that section of the law. And they said if they were working on other aspects of a system, such as a pump station and a pipeline, then those were physical manifestations of diligence toward developing their overall system.

If say, a pump station was for 20 cubic feet per second, but their conditional right allowed for 100 cfs, they didn’t wish to see the larger amount challenged, as they were simply working in a steady and progressive manner toward eventual development of the entire system and perfection of the conditional right.

BGS: So does a judge have to decide, in a claim of being in an integrated water management system, whether there’s actual progress being made in that claim?

CT: Yes. I think the court would ask, is there a reasonable nexus to the diligence application for the water right in question? Is one action leading to another? The other part of steady progress is that it cannot just be in the last week before you filed. You do have to show you were engaged in steady application of diligence efforts.

BGS: So even though it’s within the confines of an integrated water management system, there still has to be a nexus to the ultimate development of completing the appropriation.

CT: Yes.

BGS: So can Aspen claim it worked on one part of our system, even though it bares little relationship to the actual potential reservoirs, and still claim that as steady effort?

CT: That’s up to the water judge.

BGS: There is no clear standard?

CT: Well, in the diligence applications that I’m familiar with, you include all of the efforts that you feel are relevant. For example, when the River District files for diligence on conditional water rights, we often include details of our work on the recovery program for endangered fish, because it’s critical to the way the river system works today. It may not have a geographic nexus to the conditional filing in question, but it has a hydrologic nexus. And so we hope the water court recognizes our work is a necessary element to be able to ultimately develop the water right.

For example, if a city was going to build a reservoir someday they could look forward to having to go through a NEPA (National Environmental Policy Act) review. As such, they will need to study a range of alternative measures they could take, such as making sure they don’t have leaks, water conservation efforts, pricing, all of that.

You have to accept that water development is an enormous challenge, and you’re going to have to show that you’re using your existing supply to its maximum benefit and efficiency before seeking permits. So a water provider might include in an application for diligence the work done today on those types of activities, even though they don’t appear to be physically linked to the reservoirs. And they can count it as work toward a future reservoir, because it’s related.

BGS: Do you think the city should have been more actively studying its two potential reservoirs?

CT: You have to allow any conditional water right owner to decide what their own timing is that leads to development.

BGS: Okay, but is there any requirement for work to be done on a specific site or project basis? Even if you’re doing other stuff, do you still have to study the project at some basic level?

Because, in this case, it doesn’t appear Aspen has done much, or is doing much, investigating of the feasibility of the reservoirs themselves. And if the city thinks it might actually need the reservoirs, shouldn’t city officials be studying them?

CT: Not necessarily. You have to allow that Aspen has accepted from 1965 that these reservoirs may be necessary. And what they have asserted is that what they’re doing is working on the other elements of their integrated system that require immediate work, and in the succession of development and maintenance of their system, those are their priorities.

The fact that I filed for a reservoir, say, on Three Mile Creek, doesn’t mean that I have to keep drilling every six years to see what the soils look like on Three Mile Creek.

BGS: Yes, but should you have drilled once? No drilling, for example, has ever been done on the location of the Maroon Creek Reservoir, that I can find or that the city can produce.

CT: Eventually you will, but there are many other things required before eventual storage construction. Personally, I don’t know what the order is of when drilling or soils testing is required.

BGS: Wouldn’t you want to know what a drill test says about a key factor in a reservoir, which is where the bedrock is?

CT: Yes. You will.

BGS: Not now?

CT: Maybe not yet. This is probably not the first thing I need to know. Not everything is a study for fatal flaws, especially if you accept that they have a premise around their original filing that this is necessary and appropriate someday. That’s exactly what a conditional water right is.

BGS: It just strikes me as a profound lack of curiosity.

CT: I understand. I think you have a legitimate question as long as you’ll acknowledge that there is a whole series of studies, and hard and soft science steps, that have to be followed before you can get to application, let alone development. Then I think it’s a legitimate question.

BGS: So what’s the average person to make of the larger situation? The city can, in effect, say they are making progress but really, at least in terms of how most people might see the question, they are really not?

CT: Yes.

BGS: I understand then that someone can technically say in water court they are making progress, given the integrated system provision, but it seems to lack a certain integrity from a street corner or real-world perspective.

CT: Well, for example, for the Osgood Reservoir on the Crystal River, the River District didn’t feel we could tell the court “Rest assured, we’re not going to flood the town of Redstone” when the water right as decreed would have done so.

We were, in fact, looking at alternatives, but then it would no longer have been the West Divide project as conditionally decreed. And we would have admitted that to most anybody, except the court. Because if we weren’t going to flood the town of Redstone, by moving the storage right to a more acceptable location, it might be considered a different right by the court.

BGS: So that suggests there is an integrity gap in Aspen’s approach, because they are saying, in effect, “We don’t want to build the dam near Maroon Bells” and yet they are still pursuing the same rights that are tied to the dam.

CT: When you are filing for diligence, you’re filing to maintain the water right’s priority date. And it’s not a secret, and it’s not a lie, that the water right may in fact be developed someday in another fashion for another purpose in another location.

BGS: Well, then, how low are the state’s standards for diligence? If you simply say you’re making progress, and want to keep all your options open, does the court just say, “Okay, carry on.”

CT: Let me acknowledge that conditional water rights are typically not contested. You usually don’t have objectors in a diligence case. And until relatively recently, if a filing didn’t have an objector, including the state of Colorado or anyone else, water courts tended to say, “Nobody’s upset, so no harm, no foul. Continue. Your diligence application is approved.”

Now the bigger filings have had objectors. We’ve had objectors on the Western Slope from eastern Colorado for large filings that were senior to some of the junior aspects of their transmountain diversions. They have had a clear self-interest in attacking these conditional rights, because they would improve the seniority of their junior rights by removing the threat, if you will, of a senior conditional.

But most filings aren’t contested, and uncontested filings are generally approved by the court without much analysis. Admittedly, the court might take exception to that.

BGS: Switching gears, what is the harm in walking away from a water right?

CT: It depends. We maintained the rights on the Crystal because we thought storage in that basin could have been a significant benefit to western Colorado. And our choice to abandon those rights was not as simple as concluding we didn’t need storage there.

We were being challenged in court, and the challenge was to the entire West Divide project. And our partners in that project, the West Divide Water Conservancy District, still intended to pursue aspects of that project that are outside of the Crystal River drainage.

We didn’t want the tail – the potential dams on the Crystal – to wag the dog – the other parts of the project. So we looked at number one, the opposition and the risk to the other water rights outside of the Crystal River basin. And, two, we recognized that if, in the future we still wanted to pursue storage on the Crystal then a new junior storage right would accomplish largely the same goals as those senior rights associated with the conditional filing would have.

BGS: Okay, so the River District made a call to walk away from two large dams. But the city of Aspen seems to always pour cold water on that option by suggesting if they abandon them someone else is going to come in and claim them, and their decreed date of 1971, apparently.

CT: Impossible.

BGS: So if someone else comes in and claims a storage right on Castle and Maroon creeks, it’s going to have a new junior priority date? They can’t come in and claim a 1971 right?

CT: Correct.

BGS: And someone could always still come in and file for a new junior right, whether or not the city abandoned its rights?

CT: Yes, but it’s a very different water right if you’re behind a senior conditional right. And there is the “can and will” test. You may not be able to develop the new junior right if it’s in line behind a senior conditional right. It depends upon the hydrology and how much water is available to store during runoff.

BGS: So if by retaining a conditional senior storage right, you make it less likely that someone’s going to come in and file for a junior right, isn’t that an advantage for a senior rights holder, like Aspen, in this case? If so, that suggests there is value in just sitting, if you will, on a senior conditional right as a preemptive move against future interlopers.

CT: Aspen, or anyone else, may see a strategic value in that approach. But that’s not sufficient diligence. There were a number of people in the Crystal basin who were in favor of water development. Not in favor of flooding Redstone, but who were in favor of water development. And they saw our conditional water rights as a strategic card and said if we didn’t hang onto that water right, then someone like Denver Water could come in and file. But we never said that; we never saw that. It’s not a legitimate or feasible threat. Nor did we see it as a sufficient to present as diligence.

BGS: You mean you can’t protect your water rights unless you’re actually making progress towards completing the appropriation? You can’t just be doing it for strategic purposes?

CT: Correct. You have to be diligently moving toward development. Remember, though, that oil shale has largely maintained its water rights from the 1940s by researching oil shale development. Some would argue there’s no way that they’re moving toward development or perfection of those rights. But the courts so far largely have found that they are.

BGS: Ah, yes, it’s always the court’s call. But how unusual is it to have ten opposers, as Aspen does, in a diligence case? Doesn’t that change things?

CT: It’s certainly uncommon to have opposers in diligence cases. And it’s worth noting that while a city cannot hold onto water rights solely to suit their strategic priorities, opposers can challenge the city’s rights based on their own strategic priorities

BGS: In other words, as an opposer you don’t need to prove standing, you don’t have to show injury.

CT: Essentially right.

BGS: Another outstanding question I have is about storage. The Castle Creek Reservoir would hold 9,000 acre feet of water and the Maroon Creek Reservoir would hold about 4,500 acre feet.

And recently, Aspen City Manager Steve Barwick told the Pitkin County Healthy Rivers and Streams Board, and I quote, “All of this, this whole notion of how much water do we need and how much water do we need to store, and all of that, has been based upon very preliminary analysis. And now it’s time to tighten up the whole analysis and do a rational set of studies so we can have a rational discussion with the entire valley about what are we going to do here. How much storage do we need, and where do we want to put it?”

Given that, why is the city telling the state it needs 14,000 acre-feet of storage if they aren’t sure how much storage they need? How hard is it to determine how much storage a city needs? A recent raw water supply analysis from Wilson Water found the city could meet future needs without storage, even after aggressive climate change projections.

CT: I would suggest that it’s not particularly easy to look 50 years down the road and try to figure out exactly what your needs are going to be.

BGS: So, again, what should a citizen make about the duality in the situation, where the city is telling the state it’s making progress while telling citizen’s it’s the last thing they want to do?

CT: I will say I feel the city’s pain, because while they may not have any actual intent to build that size reservoir in that location, they apparently see a need and a purpose for additional storage. As we did on the Crystal. Were we going to flood the town of Redstone? Not in this day and age. We knew that. Could we admit that anywhere but the water court? Sure. But in the water court, that’s not what you’re able to do.

BGS: So does that speak to the failing of the water court? Or to an issue of integrity?

CT: You keep suggesting that this is an issue of integrity.

BGS: Well, I keep asking.

CT: I think the city recognizes the value, the purpose, and the benefit of storage at large. Storage of some size. Storage in their water supply planning.

BGS: Storage of some size, somewhere, at some point, in some location.

CT: Yes, and that’s what a conditional water right may provide. But it’s not a failing of the court, because it doesn’t, in fact, allow for unfettered flexibility. The court would likely reject a suggestion, say, that a conditional storage right on Castle Creek might be used on Hunter Creek.

BGS: But the city is studying and positioning various potential alternatives, suggesting the rights are quite portable and flexible.

CT: The conditional water right system does allow for movement. But it would likely have to have a junior right if moved too far.

BGS: But no one knows for sure until they go through the process? There’s no standard?

CT: Well there is a standard for that. If you go too far, say if you try to exchange that right to Hunter Creek, it’s going to end up being a new junior right.

BGS: So there’s generally limited flexibility?

CT: Yes. But you never know until you go through water court.

BGS: Can we discuss why the River District has not taken a position, or really, said anything, one way or the other, about Aspen’s conditional water rights? The district is not an opposer, so it apparently doesn’t oppose them, but it hasn’t said, for example, that they think those reservoirs might be valuable for any reason.

CT: Well, we’ve never been asked.

BGS: The city has not come to you? They’ve never consulted with you?

CT: No. Aspen has not asked for help.

BGS: Or sat down and asked you about your experiences on the Crystal?

CT: No. Nor do I find that odd that they didn’t. Montrose hasn’t, and Grand Junction hasn’t. Ute Water is working on developing and permitting storage on the Grand Mesa. They haven’t asked for our help. Others have. Eagle River and Water Sanitation asked for our help in putting together multi-party agreements that years ago resulted in the Eagle River memorandum of understanding, or MOU. Now we’re working on fulfillment of the MOU to develop joint-use, mutually beneficial East Slope-West Slope water.

BGS: Do you feel there’s any harm done if the city’s water rights are abandoned, from a Western Slope water rights perspective?

CT: We have not looked at them.

BGS: With respect, why not? It seems like something the River District would do.

CT: Well, this is what individual utilities do within our 15 county district. They develop their water rights.

BGS: But Aspen suggests there are threats from a Front Range bogeyman, and I wonder if you think a bogeyman is lurking, waiting for the city to give up its rights?

CT: We don’t see this as the bargaining chip that we need to, or have been asked to, help preserve. It’s a tool in the toolbox, perhaps, but we haven’t analyzed exactly how these water rights might be used in the ongoing poker game.

BGS: I’m trying to discern the significance of the River District’s neutrality and silence about the Castle and Maroon creek reservoirs.

CT: I find our position unremarkable. There are many entities that are pursuing diligence or perfection of their water rights. We have no interest in jumping into a situation that has already divided our shared constituents. And Aspen has not asked for our help in their diligence filing, or their studies. So we have no direct dog in this fight.

BGS: So, again, is there a downside to Aspen giving up the rights, as the River District did on the Crystal?

CT: I think it may be important to ask what the opposers are seeking. Are they concerned about a dam in that particular location? If the dam were somewhere else, would they have the same concerns? Are their concerns really about growth? Is the concern that Aspen has, or may have, a vision of its future, that is more crowded than some may accept? I don’t know the answer. Is it that Aspen has said that they want to maintain the instream flow rights? Is it the idea that storage can be used for meeting an instream flow, or enhancing an environmental benefit? What are their motivations? And perhaps most importantly, what happens if they succeed?

BGS: Well, fair enough. I’ll follow-up with the opposers, and they have articulated many of their concerns for the water court referee. But that’s why I asked you what harm the River District sees if the rights are abandoned. Apparently you don’t see any, which says something about the size of the bogeyman.

CT: What does Aspen see? Are there any competing conditional rights in between that if Aspen drops out, somebody moves up the line? If there’s an intervening conditional water right on the Roaring Fork, that would be pertinent.

These water rights may be a bar, or a deterrent, to another conditional rights that couldn’t be developed if these rights were senior. So I think it’s a legitimate inquiry as to whether, say, Pitkin County Healthy Rivers and Streams, has considered what the full implications are to not having these water rights. I don’t know the answer. I’m just saying it’s a reasonable question.

BGS: I agree it is a reasonable question. And a reasonable question to ask the River District, too.

CT: We haven’t looked at it.

BGS: Again, with respect, why not?

CT: Nobody’s asked us, nobody’s suggested it. It’s not a problem.

BGS: But isn’t that in your mission? I have to think that if the River District thought that if these rights were to go away it would harm the Western Slope, you would have said something.

CT: If we thought so yes, if we had looked at it and come to that conclusion. But you’re giving us too much credit.

BGS: I guess so.

CT: We haven’t looked at it. I think if they were pre-compact, or pre-1922, rights I guess it would be more interesting to us.

BGS: Do you think there’s a bogeyman out there as it relates to Castle and Maroon?

CT: I think there’s a much bigger bogeyman in the upper Roaring Fork. Castle and Maroon, hard to picture, but the upper Roaring Fork, easy to see. The evidence is all there.

Rio Grande Basin Ag Producers workshop recap

Pond on the Garcia Ranch via Rio Grande Headwaters Land Trust

From The Valley Courier (Ruth Heide):

Division of Water Resources State Engineer Dick Wolfe tackled the “use it or lose it” concern during the Rio Grande Basin Ag Producers’ Water Future Workshop in Alamosa on Tuesday.

“People think they have got to divert everything under their water right or they will lose it,” Wolfe said.

He said the important thing to remember is historical consumptive use.

Most water in Colorado is diverted for irrigation, “for beneficial crop use,” he explained. Wolfe was involved in compiling a special report issued in February 2016 by the Colorado Water Institute in an effort to educate people on the “use it or lose it” concept.

The report addresses five main concerns: 1) maintaining conditional water right; 2) administering absolute water right; 3) abandoned water right; 4) changing use of a water right from agriculture to municipal use; and 5) implications of conservation program participation.

Wolfe specifically dealt with the fourth concern, changing the use of a water right, during Tuesday’s conference. He explained that water right changes come under dual administration, both from the state engineer’s office and the water court, which adjudicates the water right.

“Any change of water right can be time consuming and costly,” he said.

A change of water rights case has to consider whether the change will injure existing users or use more water than historically used.

Water rights come with restrictions such as the maximum that can be diverted, flow rate and area of land, Wolfe explained. The historic consumptive use is critical in water use change cases, he added, with the historical consumptive use of a water right often being less than the maximum that was allowed to be diverted under the original decree. Wolfe used a hypothetical example of a water right decreed for 150 cfs (cubic feet per second), but only 100 cfs had historically been used to irrigate the farmland, with only 60 cfs actually consumed by the crop and 40 cfs returning to the river. If the owner of the property wanted to dry up the farmland and sell the water right to a factory, for example, the owner could not transfer the full 150 cfs that was decreed in the water right, Wolfe explained. The owner could only transfer the 60 cfs that was historically consumed on that property. The water that has historically gone down the river must continue to do so.

Wolfe said someone might argue that they should divert their entire decreed right, then, but the crop can only consume so much water, and that consumptive use is what can be transferred.

“The measure of that is still historical consumptive use,” Wolfe said. “It’s limited by the amount the crop can consume.”

The duty of water is also something to consider, Wolfe added. If folks are diverting more water than they need, they could be depriving others and causing unintended impacts to the stream system, he explained.

Colorado water law does not permit wasteful water use, and Wolfe said he would be issuing an order in the next few months giving clear guidance on what wasting water means.

Two Rivers Water Co. is suing farmers under the Welton Ditch

Cucharas Dam via The Pueblo Chieftain

From The FencePost:

For generations, this community under the Welton Ditch has been growing hay, winter wheat, barley, oats, vegetables and livestock, but all of that could soon come to a crashing halt…

Two Rivers Water & Farming Co. (Two Rivers) is suing Welton Water and its shareholders for what they are calling “wasteful and inefficient water use practices.”

In accordance with Welton Water’s senior rights, water is allocated from the Huerfano River in priority; however, satisfaction of those senior water rights, in accordance with Colorado law, means Two Rivers is sometimes precluded from filling its storage reservoirs while Welton Water’s senior rights are unsatisfied. If Two Rivers wins the suit, Welton Water, and its shareholders, will lose its right to divert and use water in accordance with their water rights in certain months of the year and a new precedent will be set for future water rights of Colorado farming and ranching families.

“Two Rivers is suing each of the shareholders individually, and we believe that their game plan is to get us tied up in a legal battle that none of these farmers and ranchers can afford,” said Larry Morgan, Welton Land & Water Co. president. “If we can’t defend ourselves and we lose our water rights, we will all be in serious trouble.”

TENUOUS SITUATION
Welton Water’s senior rights are still junior to the water rights of appropriators who live higher up in the mountains, meaning that very little summer water is available to satisfy the water rights decreed to the Welton Ditch and therefore the shareholders receive very little summer water. Without the winter water, it could prove difficult for Welton Water’s shareholders to run livestock on this land, raise winter wheat or get the ground wet in the springtime for planting.

“We don’t know when we’ll go to court on this; I suppose, it depends on how much paperwork they throw at our attorneys,” Morgan said. “We think they are going to deep-pocket us to death, and without water, we won’t be able to water our cattle or crops, and our land becomes basically worthless.”

John Justus, legal counsel for Welton Water, says he questions the validity of Two Rivers’ claims.

“The litigation was initially triggered by a Colorado State Engineer’s enforcement action seeking enforcement of an unappealed administrative order requiring Two Rivers to cut down the dam associated with Cucharas Reservoir, one of Two Rivers two junior reservoirs,” Justus said. “That order was based on public safety concerns as a result of the condition of the dam at Cucharas Reservoir. Two Rivers, in its defense against the engineer’s enforcement action alleged that it was unreasonable to demand that the Two Rivers comply with the dam cut-down order, and the associated costs, unless the engineers addressed what Two Rivers characterized as ‘wasteful and unreasonable water practices’ by Welton Water and its shareholders. Consistent with that allegation Two Rivers brought a separate set of claims against Welton. Although Two Rivers ultimately entered into a consent decree with the state and division engineers, which requires it to cut down the dam and complete certain other tasks, it continues its litigation against Welton Water and its shareholders.”

According to Justus, Two Rivers has several “creative claims” against Welton Water.

The first is “Two Rivers claim that certain traditional winter irrigation practices of the Welton shareholders fail to constitute beneficial use of water under Colorado law,” Justus said. “Because of the nature of this claim and its impact on their individual water rights, the court required that Two Rivers join Welton Water’s shareholders to this action. However, many ditch companies and their shareholders utilize the same types of irrigation practices that Welton Water’s shareholders do, so this should be of great interest for other people with winter water rights across the state of Colorado.”

Justus further explained, “Prevention of the form of winter irrigation practiced under the Welton would mean irrigation practices that are necessary for maintaining viability of certain lands for agricultural production would no longer be permitted. Importantly, the Winter Water Storage Program in Pueblo Reservoir, and the decree confirming the change of water rights necessary for the operation of that program would have been improper if Two Rivers’ theories are correct.”

CONCRETE STRUCTURES
The second is “Two Rivers claim that Welton’s diversion structure from the Huerfano River must be a permanent concrete structure in order to be a reasonable means of diversion under Colorado law,” Justus said. “If that was to become the new standard, it would mean that hundreds and possibly thousands of structures in the state no longer constitute reasonable diversion methods. Although the court has declined to dismiss this claim at this point in the litigation, Welton Water is confident that the law paired with the facts to be demonstrated at trial will show Two Rivers’ allegations to ultimately be groundless.”

Third is “Two Rivers claim that stream losses which occur in the division engineer’s administration of the waters of the Huerfano River in response to a ‘call’ petition by Welton Water pursuant to its senior water rights constitute unreasonable and actionable waste by Welton Water.”

In a briefing to the court, which has yet to be decided, Justus said, “Both Welton Water and the state and division engineers have argued that no such claim is cognizable under Colorado law. The court has yet to issue an order on the matter.”

The concept is simple according to Justus, “an appropriator like Welton Water and its shareholders cannot legally waste water over which it has no control, until water is diverted by Welton Water, the water remains within the exclusive administrative control and authority of the state and division engineers.”

Not only is Two Rivers seeking year-round water rights for its cannabis business, but it appears development projects might be in the works.

“In an investor update to its shareholders dated December 2016, Two Rivers says they are a vegetable company, but that document suggests that the entity is pivoting its near term focus to utilizing its water to grow hemp and for the development of infrastructure for the cannabis industry,” Justus said. With respect to its long-term focus, “that document suggests Two Rivers wants to take its existing water rights and use it in a development fashion, generating revenue through selling taps for development. Interestingly, Two Rivers water rights are not decreed for nonagricultural uses like domestic or municipal purposes. Nonetheless that document suggests Two Rivers plans to invest approximately $42 million in Cucharas Reservoir over the next two years.”

Justus noted that “eliminating the effect of Welton Water’s downstream senior rights will however potentially increase the yield of Two Rivers more junior rights associated with its reservoirs and therefore its return on its investments.” 
The case is ongoing, and as Two Rivers is suing each shareholder individually, Justus said it’s unclear when this will go to trial; however, he anticipates a July setting conference with the court, with a trial following 6 to 9 months after.

COUNTER CLAIM
Meanwhile, Welton Water has a counter-claim against Two Rivers arguing that out-of-priority depletions to the Cucharas and Huerfano Rivers by Two Rivers’ Cucharas Reservoir, in amounts approaching 3,000-acre-feet per year, are injuring the water rights of Welton and others. Welton anticipates that the unabated depletions will continue again this irrigation season.

Park County commissioners approve water lease

Upper South Platte Basin

From The Fairplay Flume (Lynda James):

The commissioners signed a resolution that approves the second amendment to the county’s water court application March 2.

The case filed in 2008 is to obtain a water rights decree for public works to use water for dust suppression and road construction.

The case also asks approval of the county’s water augmentation plan to replace water used by the department when a call on the river is in place…

The original water rights case was filed for six diversion points and plan of augmentation for 5.6 acre feet with an appropriation date of Dec. 2008…

The first water court amendment in 2013 added 12 points of diversion with an appropriation date of Oct. 2013, increased water from 5.66 to 15 acre feet and added places of storage.

The second amendment approved March 2 adds the five acre feet of water recently purchased from Lone Rock Water LLC as a source of augmentation water…

Until the county obtains water court approval for water rights and plan of augmentation, the county is using water under a Substitute Water Supply Plan approved by the State Engineer’s Office.

A SWSP allows one to use and augment water according to a written plan until the water rights application is actually approved by water court.

Ogallala Aquifer — different water law by state

Map sources:
Houston, Natalie. 2011. Hydrogeologist, Texas Water Science Center, U.S. Geological Survey. Personal communication, October 2011.
Houston, Natalie, Amanda Garcia, and Eric Strom. 2003. Selected Hydrogeologic Datasets for the Ogallala Aquifer, Texas. Open File Report 2003-296. August 2003.

From High Plains Public Radio (Susan Stover):

Texas manages groundwater with the Rule of Capture. The groundwater belongs to the landowner without a defined limit. It’s sometimes known as the Law of the Biggest Pump.

Colorado and Kansas water law is based on prior appropriation, known as First in Time, First in Right. A water right owner can pump their permitted amount if it doesn’t impair a more senior right – a water right that was established earlier in time. When there isn’t enough water to meet all needs, the owners of senior water rights have priority. The priority system works well for streams. When stream flow is low, it is generally clear which upstream, junior users must be cut off to protect the more senior water rights.

For groundwater, it is more complex to identify which water wells are impairing a more senior water well. Groundwater often provides a baseflow to streams; when heavy groundwater pumping lowers the water table so there is no longer a connection to the stream and stream flow declines, is that impairment?

Colorado state law dealt with such concerns by defining “designated groundwater basins,” those in which groundwater contributes little to stream flow. The Ogallala aquifer lies in designated groundwater basins. This allows more groundwater to be pumped, which lowers the water table, but with less risk of impairing surface water rights.

In Kansas, action is taken when a junior water right well’s pumping directly impairs a senior water right well, whether it uses groundwater or surface water. However, no action is taken if problems are due to regional groundwater declines. Like Colorado, Kansas allows the decline of the Ogallala aquifer to get the economic benefit from the water.

Management of the Ogallala aquifer is a balance between protecting existing water right holders and conserving water for the future. Attitudes change over time on what is a proper balance. Much water law encouraged development of the aquifer and protects current users. Is that balance shifting more toward conserving and extending this resource further into the future?

Senate confirms Zinke as Interior Secretary

Arizona Water News

The new Zinke team, including appointments to Bureau of Reclamation, will need to learn quickly about the complexities of Colorado River water law and the drought-induced woes facing Lake Mead

zinke-confirmation-photo

By a comfortable 68-31 margin, the U.S. Senate today confirmed President Trump’s nominee for Secretary of the Interior, Ryan Zinke.

The former Montana member of Congress will head a department that manages around 500 million acres of land and waterways in the United States.

Zinke’s department also includes the federal Bureau of Reclamation, the agency responsible for the system of dams and reservoirs on the Colorado River, the waterway that is integral to the livelihood of 40 million U.S. citizens living in the Southwest.

In a statement declaring his approval of the appointment, Arizona Sen. Jeff Flake said he looked forward to working with Zinke’s department, notably on behalf of Arizona’s Colorado River allotment.

“I was pleased to vote to…

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